Flat rate VAT

Good Afternoon all,
I have just taken on a client who is on the flat rate scheme and annual vat scheme. Their annual turnover last year was £260k which has exceeded the flat rate threshold.
How do I account for this on the vat return? I have never come across anyone who has exceeded the threshold before so any help would be much appreciated.
I suspect i have to calculate the excess using the 20% rate and adjust the VAT return accordingly, please correct me if i am wrong.

Many thanks
Deborah

0

Comments

As I understand things, every business registered on the flat rate scheme for VAT should be checking their gross turnover once every 12 months. The date the turnover should be checked is the anniversary from the date the business registered for the flat rate scheme. So if a business registered for the flat rate scheme on 01/01/2013 they would have to check their gross turnover in the previous 12 months on 01/01/2014. If the gross turnover exceeds £230,000 that business would have to deregister for the flat rate scheme on the next VAT return. For example, if the turnover exceeds £230,000 gross during the VAT period Dec 13 - Feb 14 the business would have to start using standard VAT accounting from Mar 14 (even though the threshold was breach on 01/01/2014). In January 2014 you would write to HMRC letting them know that you need to deregister from the flat rate scheme and will be using the standard scheme from March 2014 onwards. In your situation I would phone and write to HMRC stating you will be using standard VAT accounting from the next VAT return period. If your client's turnover has increased for temporary reasons then you should write to HMRC letting them know that it was a temporary increase and that you will continue to use the flat rate scheme.